Introduction
The finance industry is a rapidly changing business and these transformations are bound to affect the sector’s human resource (HR) management. The HR challenges that apply to the finance industry are also evolving from time to time. On the other hand, several players in the finance industry are seeking to harness their HR departments in a bid to add value to their businesses. This analysis seeks to explore how financial institutions, especially banks, can position themselves to deal with different challenges and take advantage of various opportunities in the future. The role of HR professionals has continued to change in the course of business evolution. BOA experiences several challenges to HR as a business-driven function, whose success depends on a thorough understanding of the modern corporate environment. This essay describes the challenges that the financial industry is facing in the context of HR management and the viable solutions to this issue.
Description of the Challenges Faced by BOA
Recently, there have been several shocks to both the finance industry and the economy in general (Boudreau, 2015). These shocks have necessitated a further understanding of HR-related strategies. Furthermore, most of the challenges that apply to BOA as an institution are replicated throughout the finance industry. One major challenge for the financial industry is the shortage of skills and the subsequent issue of changing demographics. For example, statistics indicate that most companies are experiencing a significant shortage when it comes to obtaining STEM (science, technology, engineering, and mathematics) skilled employees (Sayli & Gormus, 2009). Most of the specialists who work within financial institutions fall under the STEM category. Therefore, the shortage of these groups of employees is set to affect the operations of BOA and other financial institutions in the future.
Talent attraction and retention remain a top priority for BOA in the bank’s quest to hire experienced professionals in the coming years. The challenge of changing demographics in regards to BOA’s HR issues mostly applies to the top management. The famed baby boomers generation is set to retire in the course of the next one or two decades. There are fears as to whether there will be an adequate transfer of knowledge in the course of intergenerational transfer of power. HR experts have pointed out the need for institutions to harness their knowledge management to avoid future problems. According to these professionals, “knowledge has three aspects; capturing knowledge pre-retirement, capitalizing on different ways of thinking, and driving for a culture that supports creativity” (Boudreau, 2015, p. 46). Currently, BOA and most of the other organizations are experiencing retirement rates of up to about 40%, which makes the retention of these individuals’ knowledge a priority. These organizations are also concerned with the maintenance of their diverse workforces. The challenge for most organizations is to have the ability to capitalize on the various demographic constituents in the course of pursuing innovation, customer insights, and competitor advantages.
Opportunities for BOA
One opportunity that exists in light of the Bank’s challenges is in the future of digitization as a strategic HR tool. In the course of the last decade, BOA has been investing in digitization and there is an opportunity for the organization to incorporate HR management within its digital agenda. In the future, the organization will have an opportunity to scale its digital agendas from mere client services and to organizational and employee activities (Becker, Huselid, & Ulrich, 2001). Automation of people processes is a good example of a challenge that BOA will encounter in the future. Eventually, these digital contributions will solve several of the institution’s challenges including knowledge management.
It is also important for the BOA to underpin its commitment to corporate culture and values into its future HR efforts. This unique opportunity involves utilizing people-related practices and activities, which are part of overall organizational strategies. This opportunity can combat the impending challenge in regards to restructuring measures that are part of the organization’s strategy. For example, the continuity of BOA’s policies involves job reductions, mergers, and cooperation with other organizations. Therefore, various future decisions are likely to affect BOA’s workforce such as mergers, acquisitions, and re-branding exercises (Fee & McGrath-Champ, 2016). The available opportunity for solving this problem is structured within BOA’s corporate culture.
Recommendations for BOA’s Challenges
BOA should invest in coming up with a strategy that creates a steady intake of fresh employees. Therefore, although the bank faces the challenge of high employee retirement in the future, young graduates can assist in the transfer of knowledge from senior to junior employees. Furthermore, a steady intake of fresh graduates also ensures that the bank’s goal of hiring and retaining new talent is met with minimal challenges. Furthermore, the bank can utilize in-work training programs for selected employees with the view of transferring knowledge from the retiring generation and into the incoming one.
BOA recognizes the need to have capable and committed leaders holding different positions within the company. As a recommendation, the bank should continue to build leadership by investing in future leaders including offering support to professional and personal development (Mello, 2015). A good example of leadership building involves training staff in regard to regulatory matters. It is also advisable for the bank to adopt new approaches regarding performance management. Some examples of performance management include holding scheduled feedback from employees, having clear definitions of goals and objectives, and utilizing high standards of performance reviews.
Initial Steps for BOA
The bank’s first course of action should be to layout or revise its existing HR agenda. HR strategic agendas are important when building a better organization but while still maintaining the company’s corporate culture (Shepherd, 2009). Another initial step for BOA is to ensure that the goal of attracting and retaining employees is reviewed. For example, the company is expected to ensure that it is in a position to provide better and comprehensive means of support and compensation for its employees. A comprehensive HR agenda takes into account employees’ mental, physical, and financial wellbeing.
Another immediate step for the bank should be to deal with the HR department’s future performance by accelerating other aspects of development. Developing an organization contributes to the bank’s ability to handle future challenges. For instance, BOA should begin investing in new employee training and delivery methods immediately. Widening the bank’s HR reach would ensure that employees can enjoy global benefits and not just organizational incentives.
Conclusion
BOA should be prepared to deal with a myriad of HR challenges in the future. Most of these challenges involve HR management, changing economic landscapes, and the advent of technology. However, these challenges also give the bank various opportunities for implementing strategic HR practices. Some recommended future practices involve both the organization and its employees. The bank is also set to start implementing some steps in a bid to start meeting current and future HR strategies.
References
Becker, B. E., Huselid, M. A., & Ulrich, D. (2001). The HR scorecard: Linking people, strategy, and performance. Boston, MA: Harvard Business Press.
Boudreau, J. W. (2015). HR at the tipping point: The paradoxical future of our profession. People and Strategy, 38(4), 46.
Fee, A., & McGrath-Champ, S. (2016). The role of human resources in protecting expatriates: Insights from the international aid and development sector. The International Journal of Human Resource Management, 1(2), 1-26.
Mello, J. (2015). Strategic human resource management (4th ed.). Boston, MA: Cengage Learning.
Sayli, H., & Gormus, A. S. (2009). ” Border Role” of human resource management-to which side does the pendulum of Hrm swing: Employer or employees?. Journal of Contemporary Management Issues, 14(2), 43.
Shepherd, L. (2009, February 1). Seven steps to merger success: Follow best practices when a merger or acquisition is looming. Employee Benefit News, 23, 11-12.